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Grain Comments: 01-03-2024

Good morning.

Markets are mixed to lower overnight in light volume. Headlines during the night session continue to be dominated by news out of the middle east. Corn futures are trading unchanged to down a tick, soybean futures are down 1-2 cents, and the Chicago wheat market is trading 2-3 cents lower. Products mixed, bean meal is $0.50-$1 lower, and bean oil is 5-10 points higher. Outside markets also mixed, crude oil is up 60-70 cents, the Dow Jones index is 90 points lower, and the US$ index is following through on yesterday’s rally, up another 20-30 points.

Israel killed Hamas deputy leader Saleh al-Arouri in a drone strike in Beirut, Lebanon overnight, significantly raising the odds of the war spreading beyond the Gaza Strip.

At least 20 people have been reported dead following 2 explosions at a ceremony in Iran for former commander Qassem Soleimani, who the US killed in a drone attack in 2020.

Shipping company Maersk has suspended transit through the Red Sea until further notice, the company announced over night; this following the attempted boarding of one its vessels by Houthi rebels on Monday.

Ukraine this morning launched 12 missiles and several drones on Russia’s Belgorod region in the South, as it continues its retaliatory strikes following Russia’s increased bombardment of Kyiv and other Ukrainian cities since the New Year.

Russian energy giant Gazprom announced overnight that it set a new daily record for gas supplies to China on Tuesday. The company did not give a figure. Total gas exports to China in 2023 were seen at 22.7 bcm’s, vs 15.4 in 2022.

However, total gas exports to Europe from Gazprom were seen down 55.6% in 2023 vs the year prior, at 28.3 bcm’s.

Chinese President Xi Jinping, in a speech over the weekend, acknowledged China’s struggling economy, saying companies have had a “tough time” and that people have had “difficulty finding jobs.” This is not helping investor sentiment in the financial sector.

Also out of China, Chinese crude oil refiners were provided a full year import quota, in a surprise move. This encourages world oil importer demand in Q1 2024. It is also rumored that China is preparing to announce 2024 grain TRQ import licenses; these are released annually under China’s WTO agreement.

Ukraine exported 7.18 mmt’s of ag products in the month of December. Aside from March of 2023, this was the highest monthly total since the start of the war. This comes after the collapse of the grain corridor deal in July. For reference, November exports totaled 5.46 mmt’s, and October exports totaled 4.34 mmt’s.

The index fund roll/rebalance starts on Monday next week. Fund managers are not anxious to make much position changes ahead of the January crop report.

Models are in good agreement on coming monsoonal rainfall into the middle part of January, raising confidence in its arrival. Widely scattered showers were seen in Northern Brazil overnight, with totals ranging from .2″-2.50″.

Have a great day!

 

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